April 15, 2020
How To Stretch Your Recruiting Budget During & After COVID-19
by Mary Newgard
COVID-19’s lasting effect on hiring will force insurance organizations to make difficult staffing decisions. It isn’t the norm for me to write a budget & planning article in April; I assume the same can be said for your company but it’s the world we’re in. From budget and staff cuts to retirement, newly created roles and acquisition gaps, there’s not going to be enough money to cover every recruiting project. Now is the time to consider where you can trim expenses over the next 6-18 months.
Direct Hire: Trim Outside Recruiting Expenses
80% of your positions should be filled internally. Search firms cover the remaining 20% with:
- Unique, Set Apart Roles. This is any position outside the norm from executive searches to highly technical insurance roles or ones in a completely different location where you don’t have any connections.
- Opportunity Hires. Treat a relationship with a recruiter as an open partnership. When they know your business intimately, they bring opportunity hires to you. You will be first to see passive candidate referrals giving you a huge hiring advantage.
Your Action Item: Restructure contract terms.
- Descending placement % based on number of hires
- Descending placement % based on billing volume
- Different placement rates based on salary or position
- Reduced placement rates accompanied by a retainer or consulting agreement
Internal Hiring: Spread Costs Over 12 Months
Easier to forecast & definitely easier on your accounting department, spread hiring costs over a 6- & 12-month period.
- Internal Recruiter: If your staffing volume warrants a full-time position, hire an internal recruiter. Their salary (which ranges nationally from $45k-$85k) + benefits is a fixed cost you can allocate over 24-26 pay periods. Including payroll taxes and insurance you’re looking at a total cost of $75k-$100k annually.
Your Action Items: Outsource to create flexibility.
- Contract Employees: Shift as many hires as possible to 1099 status. Now, you can add & delete positions as the year unfolds. With a typical mark-up rate of 50%, the TPA covers all admin, insurance, taxes & benefits. This model works for a wide range of positions and can be managed as than full-time.
- Recruitment Process Outsourcing: You select a certain type of hiring project (say all life insurance underwriters or staff in the newly opened Phoenix branch) to be handled by an external firm. Now your internal HR team has more capacity to fill a variety of roles. Negotiate a per project rate for all hires versus contingency (with a lot of invoices & fee variance based on salaries). RPOs are calculated like this: Total Payroll x Outsourced Rate (average 18%) = RPO cost / 12 monthly invoices
Advertising: Assess Job Board Utilization
We are in this same boat with you. Capstone utilizes job boards to advertise its openings. The problem is those sites (Indeed, Careerbuilder, ZipRecruiter & LinkedIn) charge more every year for job slots and boosted postings.
Your Action Items: Cut down postings and shift money to internal advertising.
- Job Boards: Review your utilization data. You will be surprised to find that you are overpaying for slots that are not being used. At $500-$1,200/slot annually, you can quickly save money by reducing the number of paid postings.
- Careers Page: Invest in advertising on your own website. It has a double down effect that strengthens your brand (higher website SEO and more social media followers). Consider these upgrades on your site.
- $2,500-$9,000: A worthwhile investment in brand videos (30-90 seconds each) with the theme Working Here. Post videos on your website and social media.
- $5,000-$10,000: Bright and shiny marketing pieces designed by a graphic artist to share with candidates during the recruiting process. This can include social media placards advertising jobs and fact sheets/About Us PDFs containing important information on benefits, career progression and culture.
- $15,000-$20,000: A fully functional job search feature on your careers page to mimic job boards.
“Ask the Insurance Recruiter” is a monthly column written by Mary Newgard, Partner and published in partnership with Insurance Journal Magazine. Visit Insurance Journal Magazine’s website for a complete list of previous articles. For questions and comments, email Mary at email@example.com.